Situational Influences and Eating Habits

What and how people choose to eat is not a conscious decision; it is affected by colors, smells, lighting, plate size and culture. Numerous studies on eating habits have revealed some surprising facts:

• A bigger spoon causes people to eat 15% more.
• A bigger plate causes people to eat 25% more.

• A cold restaurant will make people eat more food, as will fresh flowers on the table.
• People will eat 28% more food if the plates are cleared from the table, rather than piled up.
• Red tablecloths will increase the appetite and people will eat more.

• Teens who buy lunch with cash buy more junk food than if they use a debit card.
• People will eat more M&M’s if they are in 10 colors rather than 7 because they’ll crave the variety. People who have more menu options eat more and if there is any semblance of variety (colors) it ups the intake even more.
• In an experiment, people in a movie theater were given tubs of stale popcorn, those who got bigger tubs still ate 35% more.
• Professional bartenders cannot overcome this one– they always pour more alcohol into a short wide glass rather than a tall skinny glass.
• People who eat at Subway, thinking it is healthy, compensate later by filling up on more snacks than a McDonalds eater.

by Mkt Teachers

Situational Influences and Online Shopping

a. Why consumers shop online

i. Convenience: What could be easier than shopping from your own home (or on the go with a smartphone) anytime you want?

ii. Communication: Instantly correspond with other consumers, sellers and company representatives to easily gather information about a purchase.

iii. Choice: Consumers can rapidly search through multiple stores from all over the globe instantly. Consumers can also easily research a company/product capabilities and popularity.

iv. Cost: Consumers feel empowered when they can shop around at such a fast speed, they can make more informed purchasing decisions especially when it comes to prices. Companies need to make sure they are offering prices comparable to their competitors, because customers will figure it out and not purchase from them!

v. Customization: Another positive aspect of the Internet is the ability for the customer to purchase a product exactly how they want it; and the company avoids paying inventory storage costs and overhead for a retail location since the products are made and then shipped directly to the customer. Dell Computers turned their small operation into a multi-million dollar company on this marketing idea.

vi. Control: Customers seem to have more control over quantity, size, style, color, price and the type of vendor that they purchase from when using the Internet. Purchases for second-hand products can be made on e-bay, creating a whole new genre of stores.

b. The 7 C’s of Driving Website Commerce

i. Context: A website’s layout, visual design and use of colors, white space, graphics and information have to all create a theme that makes sense for the company and products.

ii. Commerce: A website’s ability to allow customers to make purchases safely, and also to make returns.

iii. Connection: Links to other websites. The amount of links depends on the company and the products.

iv. Communication: A website can allow communication between the company and the consumer, some sites use live chat capabilities, others use a message board or email.

v. Context: A websites use of text, fonts, sounds, music, video demonstrations to convey a theme or help convince customers to purchase.

vi. Community: Some websites will allow customers to talk to each other via message boards or leave comments about products.

vii. Customization: A website can be customizable by the customer and tailor itself to different users. Amazon.com makes personal recommendations based on past purchases. Some gaming websites will allow the user to choose to see information on only the games they own.

c. Online Consumer Lifestyle Segmentation

i. Click and Mortar— Only shop online for research, then go to the physical store to make purchases.

ii. Hunter Gatherers— Enjoy going online for the thrill of auctions and bargain hunting

iii. Brand Loyalists– Enjoy going online, but only to look at websites and products they are comfortable with.

iv. Time Sensitive Materialists– Only go online for news update, stock updates.

v. Hooked, online and Single— Young, (tweens, teens, college students) who are extremely tech proficient and use the Internet for news, networking and shopping.

vi. Ambivalent Newbies— Not technologically proficient, may only go online occasionally or to check e-mail.

by Mkt Teachers

Situational Influences and Time

Time is something that customers give up in order to shop and this is a very valuable thing! It is necessary to give up time for consumption to occur, but time can affect consumption in three forms:

i. Time Pressure— When customers don’t have a lot of time they tend to process less information because time is important for thorough problem solving. Customers in a hurry may choose the well- known (and usually higher priced) brand because they don’t have time to consider the alternatives. Or they may choose the least expensive product and risk buyer’s remorse (cognitive dissonance).

ii. Time of Year—Consumers are affected by the changing seasons, but not just according to the product needs such as coats in winter and sunscreen in summer, they are also affected by the amount of daylight. Due to daylight savings time and the increased amount of darkness in winter, consumers shop earlier in the day, and they tend to purchase more comfort products. Overall consumers tend to spend more money in the summer. Food items vary with the season and holidays.

iii. Time of Day—Everyone has a circadian rhythm, which helps regulate our sleeping and awake times. Most people are naturally sleeping (or tired) during midnight to 6am and from 1pm to 3pm. People who shop during these hours may have less energy and may not make informed purchases. In order to counteract this many people turn to energy drinks and caffeine in the morning hours. Danes, Italians, French and Americans drink coffee, while those in the UK, and some Asian countries drink tea.


by Mkt Teachers

Situational Influences and Atmospherics

The three major situational influences are Time, Place and Conditions.

• Time—If a customer is in a hurry or the store is crowded this can change the way information is processed. The customer may not have time to consider all the brand alternatives and this will affect what they purchase.
  • Place—the décor, furniture, colors and clothing of the employees will affect the motivation of the consumer. For example, a restaurant selling seafood seems to have more credibility in an “ocean” themed décor environment.
  • Conditions—Women tend to purchase more when they shop with friends, taking your kids to the grocery store increases your likelihood of spending more money 150% because parents shopping with children are more likely to be influenced by the product preferences of their children.  Climate will affect purchases, if it is cold outside you would be more likely to purchase a hot drink.
  Marketers have researched customer behavior enough to know that certain environmental factors will affect their shopping habits—smell, lights, music, colors, crowds, safety and employees. The term for this research is called atmospherics. Atmospherics is the physical manipulation of the store environment (physical or online) to change the mood of the customer. Creating a positive store environment causes people to stay in the store longer and the longer a customer spends in a store the more money they are likely to spend. Creating positive feelings about a store also generates loyal customers and repeat shopping visits.
• Physical Features—décor, lights, sounds, weather, employee clothing, store layout and visible configuration of shelves and merchandise.  All of these things combine to create feelings in customers. A department store that wants to sell expensive clothing needs to have stylish fixtures, colors and furnishings, and the employees should fit into this stylish atmosphere. Sales personnel can often persuade a consumer to purchase or not purchase a particular brand based on their mood, attitude, clothing and knowledge of the products. Store layout can also affect brand purchase as well as the total in‑store expenditure. Grocery stores are arranged to maximize exposure to items not routinely purchased while obtaining normal grocery purchases.
• • Point‑of‑purchase displays can attract attention to a brand and produce a greater likelihood of purchasing that brand. For example, an end‑of‑aisle display featuring a particular brand of snack food will increase purchases of this brand over normal shelf sales.
  • Color—colors mean different things to different cultures, and the store (or website) needs to have full understanding of colors and their meanings. Colors are used to affect customers and in most cases they won’t even know it!  In the US red is an energy color and is often used to stimulate the appetite, where as blue is a calming color. 
  • Smell—the study of smell and how they affect shopping habits is just beginning, however we already know one thing—if a store smells bad, customers won’t shop long!
  • Music—music influences a customers’ mood. Slow tempo music relaxes the customer and causes them to linger in the store longer, whereas fast tempo music may be better for stores and restaurants that need rapid turnover. Music isn’t just about speed, the type of music must match the store. A Texas barbeque themed restaurant would attract more customers with country music rather than pop music.
  • Crowds—are always going to lead to negative shopping experiences. The more crowded a store is the more likely customers are going to feel confined and unhappy and will find a way to spend less time in the store and may make uninformed shopping decisions.
  • Promotional deals, such as cents‑off sales or 2‑for‑the‑price‑of‑1, offer an economic purchase incentive. This is done quite often in the promotion of frequently purchased products like toothpaste.
  • Stock‑out means that a store has run out of a product (or has not restocked the product) and this can lead to brand switching or store switching. There are several things a customer would do in this situation:
  CUSTOMER BEHAVIOR IN A STOCKOUT SITUATION
  PURCHASE BEHAVIOR
  Buy a substitute product at the original store, this may replace the intended brand for future purchases
  Wait to purchase until the intended product is available
  Not make any purchase
  Purchase the intended brand at another store
  VERBAL BEHAVIOR
  Consumer makes negative comments about the original store
  Consumer makes positive comments about the substitute store
  Consumer makes positive comments about the substitute product
  ATTITUDE CHANGE
  Consumer has a negative attitude about the original store
  Consumer has a positive attitude about the substitute store
  Consumer has a positive attitude about the substitute product
  Retail outlets are physical (or virtual online) stores that sell product/services. Manufacturing companies make the products that retail outlets sell.  Retail outlets can be an independent retailer, a chain store or a franchise.  An independent retailer usually only has one location and is a small business owned by a person or group of people.  A chain store is a store with many locations throughout a region. A franchise is when a corporation sells partial ownership of their store locations to local businesspeople. The owner then runs the store for the corporation and in turn makes a percentage of the sales as profit. McDonald’s is perhaps the best known franchise in the world.  There are several different types of retail outlets, each with its own level of service and product assortment. The amount of gross margin a company makes often depends on their level of product turnover. The less product turnover a company has the more likely they are to need high prices in order to make a profit.  Here is a chart with some examples of the different types of retail outlets:
  
  

  Chart of Retail Outlets

  Type of Retailer	Example	Service Level	Product Assortment	Price	Gross Margin	Description
  Department Store	Macy’s, Bloomingdales, JC Penny	Medium to High	Wide	High	High	Due to the high overhead and the exclusivity, product doesn’t  turnover quickly so prices are high, and profit must be made off of the price
  Specialty Store	Harley Davidson Store, Pet Smart, IKEA	High	Narrow	Medium to High	High	Sell only special items in one category and therefore don’t have high turnover so profit must be made off of prices
  Supermarket	Kroger, A&P, Publix, Albertsons	Low	Wide	Low to High	Low	Profit is made from turnover of product and the number of customers—if more customers come into the store they will have more sales; and the more time customers are in the store the more money they will spend
  Convenience Store	7-11, Shell, Exxon, BP	Low	Narrow	High	Medium to High	Usually a small store attached to a gas station—prices are high due to the small selection and the lack of options by the customer
  Drugstore	Walgreens, CVS, Rite Aid	Low (high at the pharmacy counter)	Medium	Medium	Low	A store with a limited selection of convenience items with a pharmacy counter inside
  Full-Line Discounter (Big Box Store)	Wal-Mart, Target, www.amazon.com	Low to Medium	Wide	Low to Medium	Low	Profit is made from turnover of product and the number of customers—if more customers come into the store they will have more sales; and the more time customers are in the store the more money they will spend
  Supercenter	Wal-Mart Supercenter, Super Target	Low to Medium	Wide	Low to Medium	Low	A Full-Line Discounter with a grocery store attached
  Specialty Discounter	Ross, Marshalls, www.overstock.com	Low	Medium	Low to Medium	Low	These stores sell product that did not sell at more expensive stores. Products are usually brand names, prices are lower and store usually specializes in one type of product—such as clothes and shoes.
  Warehouse Club	Costco, Sam’s Club	Low	Wide	Low (but have to buy in bulk)	low	Customers have to pay a membership fee to shop; Product is sold in bulk; Wide product assortment including groceries, home goods and electronics at discounted prices
  Off-Price Retailer	Big Lots, Dollar Tree, Family Dollar	Low	Narrow to Medium	Low	Low	These stores sell product that did not sell at other stores. Prices are lower and there is a high rotation of product so the store may not sell the same products all the time.
  Thrift Store	Salvation Army, Goodwill	Low	Medium	Very Low	Very Low	Products are donated and have been used by other people. Prices are extremely low and most of the profit is given to charity.
  Restaurant	McDonalds, Starbucks, La Bernadin (in New York City)	Very Low to Very High	Very Narrow	Very Low to Very High	Low to High	An establishment that serves food prepared by chefs in a kitchen; this can range from fast food to a lavish 10 course sit down meal.  Prices vary according to service level. Product is narrow because restaurants specialize in one type of food category.

  by Mkt Teachers